Estimating Griliches' k-shifts
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Griliches’ k-shift, a crucial parameter in the welfare evaluation of technological change, is shown to be equal to the radial rate of technological change plus a vector of commodity bias parameters obtained from the distance function. The analysis permits decomposition of sectoral productivity growth into productivity growth by commodity. The k-shifts estimated for wheat, corn, soybeans and beef in U.S. agriculture indicate a decrease in the marginal cost of production of corn, soybeans and wheat during the 1950-1993 years.
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